Business bankruptcies fall in Bergen, rise in Passaic

Business and consumer bankruptcies declined in 2013, the result of an improved economy, tighter restrictions on credit, and the belief among borrowers that they now have a better chance of modifying their mortgage loans, attorneys said Monday.

The number of business bankruptcies in New Jersey last year was about nine percent less than the year before, with the figure in Bergen County falling about 13.5 percent and the number in Passaic County increasing, figures released by the U.S. District Court for New Jersey show.

The figures for the state and Bergen are now at their lowest level since 2007, the last full year before for the recession, after which bankruptcies soared to a peak more than 60 percent higher than they were last year.

Consumer bankruptcies also fell, by 5 percent in Bergen, 3 percent in Passaic and 7 percent statewide, dropping to their lowest levels since 2008, the figures show.

Bankruptcy attorneys said one reason the business figures continue to fall is that the most distressed companies have already filed for bankruptcy or gone out of business, leaving those better able to survive.

"The weaker ones have gone," said Ronald I. Levine, a Hackensack bankruptcy lawyer. He added that tighter credit in recent years has made it difficult for businesses to file for reorganization, known as Chapter 11. Such a filing usually requires the company to secure a loan to tide it over while restructuring takes place, and many companies can't get it, so they continue to struggle or shut down.

It's unclear why they would rise in Passaic, after falling for the previous two years.

Stacey Meisel, a Livingston attorney who represented the La Plaza restaurant in the Crowne Plaza Hotel in Secaucus, which filed for liquidation in June, said tight credit also has prevented businesses from getting into difficulty.

"If you don't have any lending, you don't have any defaults," she said, adding that banks also appear more willing now to work out a repayment schedule for existing loans, rather than taking a more rigid approach that can lead the borrower to file for bankruptcy.

Likewise, on the consumer side, mortgage holders that are behind on their payments believe they have a better chance of getting their loan modified, and so they don't go for bankruptcy, she said.

"Most people don't want to file for bankruptcy," she said. "It's their last choice."

The 185 business bankruptcies in Bergen and Passaic included the liquidations, known as Chapter 7 filings, of Dandana TV, the Rochelle Park reality television and music programming oriented TV network for Middle Eastern viewers, Scardino's Pizzeria & Restaurant in Lodi and Gregory T's, the Emerson restaurant.

The Landmark, the East Rutherford banquet hall that carved a high profile hosting weddings, corporate events and big-time political fundraisers, also opted for liquidation, after struggling against strong competition in the banquet and party market.

The companies that sought reorganization, known as Chapter 11, included 259 Johnson Avenue, a River Edge company that also did business as Dinallo's Restaurant. The restaurant filed for bankruptcy after owner Robert Dinallo got into a bitter legal battle with developer Joseph Sanzari over Dinallo's management of the Stony Hill Inn, which they once co-owned.